The Energy Transition | GB Energy makes first step as developer with funding for NHS and school solar panels

This week we look at GB Energy's plan to cut energy bills for schools and hospitals, the government initiatives to encourage community engagement in the energy transition, responses to the Department for Transport's draft climate change adaptation strategy, and much more.

GB Energy secures developer mandate and plans to cut bills for schools and hospitals

The start-up board of Great British Energy met for the first time on 17 March in Aberdeen.  Amid early uncertainty as to GB Energy's role, the publicly owned company, which is backed by £8.3 billion over this Parliament, has declared a new mandate as a developer of clean energy projects. It aims to establish itself as an expert energy developer that invests in, builds and operates clean energy projects across the UK, helping to deliver Clean Power 2030.

GB Energy's first project in England will put rooftop solar panels on around 200 schools and 200 NHS sites (covering a third of NHS trusts) through £200 million in funding. Estimates suggest this could save up to £400 million on energy bills over 30 years, with the savings reinvested back into schools and the NHS.

The project will target sites with buildings most suitable to accommodate solar panels in areas of England most in need, with a focus on the North East, West Midlands and North West. The first panels are expected to be installed by the end of summer 2025.

Charles Wood, deputy director of Energy UK, said: "Cutting energy bills not only means more funding for these essential public services, but also shows how the shift to clean energy can directly benefit local communities and give them a real stake in such initiatives".  

GB Energy has been established to support projects throughout their life cycles from early development to successful operation. As well as owning stakes in the projects it develops, GB Energy will co-develop projects with the private sector, local authorities and community energy groups through equity stakes and joint ventures.

UK government supports community and mayoral renewable energy projects

The Department for Energy Security and Net Zero (DESNZ) has released two publications this week in respect of community energy in the UK: the government's response to barriers faced by community energy projects and the Mayoral Renewables Fund scheme guidance.

The government has published a summary of the feedback it received in response to its call for evidence on community projects, which closed on 30 June 2024. This makes good on its promise during the passage of the Energy Act 2023 to consult on barriers to and benefits of the roll-out of community energy in England (albeit that 13 respondents (constituting 11%) were located in other devolved administrations).

The sample size of respondents was small, however, and the weighting towards respondents being located in the greater South East and the South West (45%) of England. Responses were evenly distributed between urban and rural environments.

Primary barriers

Regulatory complexities were among the primary barriers identified. Issues reported included the complexity and cost of grid connection, lengthy planning and permitting processes, and difficulties in navigating the electricity market.

Financial constraints were another issue, including high upfront costs, long payback periods and limited access to funding and subsidies. Technical difficulties were also reported. These included a lack of technical expertise and resources within communities, and challenges in integrating renewable energy sources into the existing grid.

Access to funding was the most frequently cited barrier to the success of community energy projects. The government reported several suggestions for overcoming this, such as greater provision of loans and other financial aid, capacity funding, and blended finance. This could build on the existing support schemes like the Community Energy Fund and the Enterprise Investment Scheme.

Renewables grants

The Mayoral Renewables Fund (MRF) is a strategic initiative aimed at providing £10 million of grant funding via mayoral strategic authorities (MSAs) for renewable energy projects within and for the benefit of local communities. The MRF scheme constitutes part of GB Energy's early delivery phase in 2025 and 2026.

Eligible MSAs are set out in the published guidance. They can apply for grant funding to support eligible projects in an amount of up to £70,000 depending on the project's scale and impact. Eligible projects include those focusing on renewable energy generation, such as solar photovoltaics, wind, hydro, co-located batteries and other storage, microgrids and electric vehicle infrastructure. Applicants must demonstrate the technical feasibility, financial viability and community benefits of their proposed projects. The engagement with or benefit to local communities is mentioned in four of the scored assessment criteria for applications.

Successful applicants are required to provide regular progress reports and financial statements to ensure transparency and accountability. The MRF also offers technical assistance and guidance throughout the project implementation phase.

Government responds to consultation on adapting the UK transport system to climate change

The government has published a summary of responses to the draft climate change adaptation strategy issued by the Department for Transport (DfT). Running between April and May 2024, the consultation on adapting the UK transport system set out the sector's strategy and detailed proposals to develop a well-adapted network that is "flexible, reliable, operates safely and is responsive to climate change".

Views on several policies were sought from a variety of stakeholders, including transport infrastructure operators, local transport authorities and sector-wide stakeholders. The aim was to understand whether respondents supported the proposals, considered them effective and whether there was anything further the government could consider in the sector to adapt to climate change.

It received 125 responses from a variety of sub-sector participants, including roads, rail and aviation. The consultation was split into four "chapter" themes: collaboration, regulatory, economics and culture. The responses indicated that the majority of respondents supported the various policy proposals, with at least 60% in favour of the proposals put forward for each chapter – and each of which also received a minimum of that level of support. Proposals to standardise the DfT's approach to climate adaptation, encourage collaborative approaches and review regulators' remits gained high support.

It was noted there were recurrent requests for other issues, such as funding to support adaptation, including training and skills, and requests for more guidance and data on climate risk assessments to support interpretation and action. However, overall, the responses reflect industry willingness to integrate climate adaptation so that it becomes "business as usual".

The government said that the response and outcome will be published on the consultation's home page "in due course".

UK government to restart climate change dialogue with China

The government has announced its plan with China to restart the climate change dialogue, with no formal dialogue since 2017.

The UK-China Clean Energy Partnership signed in 2015 is expected to be "refreshed" to cover "areas of mutual benefit", notably emerging technologies, the UK's expertise in phasing out coal and China's experience as the world's largest investor in and supplier of renewable technology.

The government has stated it welcomes investment from China in its energy sector, provided that investments align with the UK's growth objectives and national security interests, and in this partnership is seeking a "long-term, strategic, and pragmatic relationship with China".

This article was written with the assistance of Ellie Smyk, Imogen Drummond, trainee solicitors, Sumaiya Hafiza, solicitor apprentice, and Tomi Agbonifo, paralegal.